Sweet Vindication: Jury finds State Farm defrauded the National Flood Insurance Program

Folks this case is the reason there is a Slabbed. I know my former partner in blog is proud and smiling big tonight.

Jury finds State Farm committed fraud against federal government ~Anita Lee

They all did and thanks to a pair of brave, resolute young women it also now a fact Jack. :-)

I’ll have more on this as time allows.

22 thoughts on “Sweet Vindication: Jury finds State Farm defrauded the National Flood Insurance Program”

  1. You & Max Johnson called it in my book – this is the reason I discovered Slabbed and while disappointed that they screwed the Government, I appreciate the hard work you guys put into the pursuit of these stories.

    Kids, hit the donate button just above the Broussard Pokey countdown on the right and help keep Doug’s efforts to report on stories like this rolling.

  2. Bravo! I called State Farm to ASK about possibly making a claim and they now have it in their record and on my insurance score that I made a claim.

    Bastards….

  3. The relators won against all odds. Congratulations! Magnificent job by the lawyers. Let’s hope the 5th Circuit does not bail the Farm out.

    1. A dose of reality: this was an unlikeable scamjob insurer. I’ll give you a better read on juries and their grasp on justice in another qui tam matter involving local governments scamming the public when the matter goes nuclear. Unfortunately greed and envy often prevail on jurors to NOT award judgments against governments.

  4. Congrats to the Rigsby sisters and to Augie Matteis and his colleagues.

    This is great news, but it is disgraceful that it took 7 years to allow a jury to consider whether it is fraud for an insurer to pay the federal flood policy in full long before any attempt to legitimately determine the cause of the damage or allocate the portions of the loss due to wind and flood.

    This case was an easy one because the house was still there to be examined so it could be proven false after the fact, and there are hundreds of similar cases, but there were many others where the winds caused substantial roof and wall failures and then later the storm surge caused additional damage.

    The court should not make the Rigsbys’ attorneys have to prove long after the fact that wind caused those losses. It should be enough that State Farm did not even attempt to prove that flooding caused 100% of the losses before billing NFIP for the flood limits. That is the definition of a false claim.

    1. “Disgraceful” but that’s the way it is, Brian, regardless of how good a case is, you have to realize that the game is for everyone to eat at the table. Defense counsel for the government get a paycheck on a routine basis and there’s no incentive for defense counsel when they get paid on a hourly rate. So called “tort reform” gives you Jaundice v. Jaundice writ large, essentially rewarding the well-heeled in a manner which resembles feudal stratification.

      1. Although Worley Claims did not adjust the McIntosh claims, Worley did TONS of Katrina claims for State Farm. A section from Worley’s Catastrophe Claims Manual is just a tad bit at odds with Lecky’s testimony:

        Hurricanes

        Most structures can withstand with minor damage a relatively low-velocity hurricane with winds between 75 and 90
        mph. However, as wind speeds increase, hurricane destruction becomes severe. In August, 1992 Hurricane
        Andrew crossed southern Florida with sustained wnds in excess of 130 mph, obliterating homes and essntially
        causing the same damage as a thirty mile wide tornado.

      2. State Farm and other insurers paid several hundred thousand Katrina wind claims inland all the way into Tennessee and Georgia. They knew the winds were destructive for a long time near the Gulf but they found crooked engineers who would say that the surge came first rather than 4 hours after high hurricane winds and others who would be willing to blame flooding for all the damage rather than legitimately determine what damage was caused by wind and wind-drive debris before any flooding happened. They were trying to use the anti-concurrent causation clause to get away with assigning 100% of the loss to NFIP wherever there was both wind and flood damage. It wasn’t until they got to court that they started trying to offer evidence and testimony about what caused what damage where even though the burden of proof was their responsibility all along.

          1. Unfortunately, the slam dunk evidence on the conspiracy – the internal emails of the engineering company – are not permitted as evidence.

  5. If you look back and see who State Farm settled with for the full value of the losses incurred early on you would find the names of many politicians and some federal judges. Remember Trent Lott,Gene Taylor,Judge Guirola.Scruggs got their claims paid very quickly.Wonder how and why?

    1. That is not really the way it happened. Like a bunch of other people, they did not get paid anything on wind so they sued. Guirola sued Nationwide, I think, not State Farm.

      I know in Taylor’s case he was reluctant to settle. He wanted State Farm in court and even after the settlement he did not let up on them to pay everyone, and especially to have to repay the federal government for overbilling NFIP.

      That State Farm settlement happened in early 2007, a year and a half after Katrina. It included all of Scruggs State Farm clients at the time, not just selected ones. In fact, Scruggs and State Farm tried to get the court to approve a settlement plan for all State Farm policyholders including those that were not Scruggs clients and those that had not sued, but the judge turned that down as State Farm probably knew he would. State Farm played Scruggs greed by offering him that global settlement to get him to get to Jim Hood. State Farm conditioned the settlement on Scruggs convincing AG Hood to drop the state grand jury investigation. Some of Scruggs clients did not accept the settlement and moved on to other attorneys. Some came out better. Some did not.

  6. Where is Magistrate Shushan? Or the rest of the Louisiana Eastern District now?

    Great job Mississippi bar! Hopefully, 5th Circus keeps its mits off the decision.

  7. Does the qui-tam judgment offset the hundreds of thousands of dollars SF saved by being awarded a credit for flood insurance payments in Louisiana?

  8. Meanwhile, in Sandy land…

    Insurers stick restaurants with Sandy tab
    Many eateries see business-interruption claims denied by insurers, on grounds their problems were caused by flooding

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